Imagine waking up on the morning of January 1, 2000. The grey dawn outside reminds you that the previous night's New Year celebrations ended hours earlier than expected. Then you remember—the revelry had been rudely cut short when the electricity was cut five minutes into the new year. Along with everyone else, you waited for a while, but when the power did not return you decided to call it a night. As you walked to your home nearby, you noticed that several people were having trouble starting their cars. You remember thinking it odd that so many should stall at once.

Back in the present you notice your bedroom is cold. A glance at the clock, where instead of glowing red numbers you see only a black face, explains why the furnace does not work. You reach for the telephone and discover it to be as dead as the clock. A glance at the darkened houses outside your window reveals that the power failure is widespread and you consider going back to sleep.

But a gathering on the sidewalk outside attracts your interest. Dressing quickly, you join them. You might as well. Except for the light breeze it is no colder on the street than inside. From your neighbours you learn that everyone else is in the same trouble. Your sense of impending doom is heightened when one reports that his efforts to extract cash from an automated teller machine were fruitless. Nor does it help that a battery-powered radio endlessly repeats an emergency broadcast assuring listeners there is no emergency. You are suddenly seized with a nightmarish horror—some thief has stolen all the comforts of modern civilization. You pinch yourself; this surely must be a dream.

When the year 2000 arrives, less than two years from now, this scenario could be grim reality. Thanks to a computer-programming phenomenon popularly known as the "Millennium Bug," or the Year 2000 problem—Y2K for short, the first few days or weeks of 2000 may be the most trying times most people have ever endured. Power and telephone service could be interrupted over large parts of North America and Europe. Emergency services, in the event their equipment still works, will have no way to find out where assistance is needed. And with electronic communications knocked, it will be nearly impossible for governments to contain riots, should they break out, or even for police forces to coordinate their efforts against looters (see story, page 31).

It is possible that the millennium bug will not be the major disaster that many computer experts predict, but if the world's technology does crash (if only for a few hours or days) it will be due entirely to the lack of two little numbers in most computers. When the computer revolution began more than 30 years ago, programmers decided because the computers of that time had such limited memory and storage capacity that dated material would internally identify the year by the last two digits only. The year 1989, for instance, is read by computers as 89. Thus, for most computers, the year 2000 will be 00, a meaningless number that computers will interpret in different ways. Some will decide the year is 1900. Other computers will assume the double nought means 1980, or some other year that it uses as a baseline.

The meaningless number will cause some computer networks to lock up, so badly muddled they cannot be repaired unless chips are replaced. A computer that reads the year 2000 as 1900 may decide that most of the people listed in its files have yet to be born. If it works at all, such a computer may choose not to send bills or pay cheques to imaginary people. But at the very least, the kind of transactions upon which the world's economy depends could be seriously disrupted.

Business computers are so interconnected that even if a company fixes all its Y2K problems but a system fails in another company, grave errors could be communicated to the first company and many others before anyone could act to prevent it. Thus, a significant amount of the world's manufacturing capability, transportation systems and banking and insurance industries could be affected, in addition to the government computers that handle such crucial matters as taxation, vital statistics and benefits cheques.

Governments and businesses are beginning to take the problem seriously; witness the rushed release two weeks ago of a major report by the federal government-appointed Task Force 2000. Entitled "A Call for Action", and originally scheduled for publication in May, the task force's report carried the signatures of the presidents and CEOs of 14 of Canada's largest businesses and business organizations. As a measure of their concern, the businessmen laid aside their characteristic caution and demanded the drive to fix the millennium bug be made a "national priority."

In the report's cover letter, Jean C. Monty, task force chairman and CEO of telecommunications giant BCE Inc., warned that failure to deal with Y2K, is "putting the entire Canadian supply chain at risk." In the press conference accompanying the report's release he was even less restrained. "Our first recommendation is addressed to those company owners and managers who have not yet taken formal action," he said. "We urge them to do so immediately. Time is fast running out and the deadline is non-negotiable. For some it might already be too late for full preparedness."

The task force made 18 recommendations. They include: a formal action plan for Y2K preparedness should be implemented immediately by every business executive and owner; that all lending institutions require a formal Y2K action plan from corporate borrowers as a prerequisite for loans; that the governments of Canada and Quebec adopt immigration laws to create a special temporary category to allow persons with Y2K skills to work in Canada; that businesses be allowed to deduct Y2K expenses in 1998-99, even if the money has not been spent; and that securities regulators should look into requiring firms to disclose Y2K preparedness.

A report issued the same day by the Conference Board of Canada warned that failure to deal immediately with the millennium bug could throw Canada into a recession in the first half of 2000. Y2K has afflicted the federal government already. A Revenue Canada computer system designed to coordinate follow-up letters for corporate tax collectors failed a few weeks ago when it compiled a list of mailing dates for the year 2000. The computer read the date as 1900 and put out a list of 20,000 corporations that as far it knew had accounts in arrears for almost a century.

Business leaders and bureaucrats are speaking out so strongly because the people who most need to consider their message do not appear to be sufficiently concerned. A survey of more than 2,000 firms conducted in December by Statistics Canada indicated that although nine of 10 firms were aware of the issue, only half were taking action. Of those, only one in 10 has a formal action plan in place.

Which means it is too late for most firms to fix the bug, in spite of the guarded optimism expressed in the task force report. Jim Seymour, an international computer consultant, wrote in the February 10 PC Magazine, "Many, many firms...now won't possibly be ready to avoid disastrous problems come that cold January morning. For one thing, virtually everyone competent in the Y2K analysis-and-fixes business is already fully booked through January 1, 2000, and beyond. Companies with Y2K problems now often cannot find people to work on those problems. Not just enough people, but any people."

To the layman the solution seems simple—just place the digits 1 and 9 before any year-sensitive dates wherever they appear in computer programs. But Edward Yourdon, chairman of the Cutter Consortium research organization in the U.S. and a pioneer developer of software engineering methodologies, points out in his new book Time Bomb 2000 (co-authored with his daughter Jennifer) that the world's top 30 most significant industrialized countries remain dependent on computers with approximately 700 billion program lines written in the archaic COBOL language. Every one of those lines has to be examined and corrected. To do so will require 3.5 million person-years of effort, and a minimum US$300 billion in repair costs. All this depends on finding people who still remember how to program in COBOL.

To illustrate his point Mr. Yourdon points to the U.S. Social Security Administration (SSA). Mr. Yourdon reports that the SSA began to fix its Y2K problems in 1991, far ahead of any other government agency, and much earlier than most corporations. But on June 30, 1996, the SSA admitted that 400 programmers assigned to the project for five years had succeeded only in fixing six million of the 30 million lines of code in its computer programs. The SSA says that it has developed more sophisticated tools and promises to finish the job on time. But Mr. Yourdon dismisses this as too optimistic.

In Canada task force chairman Monty estimates that correcting the Y2K problem will cost the country at least $12 billion. Even when broken down by individual institutions and businesses the costs are staggering. The University of Victoria alone expects to spend $500,000 and upwards of 10,000 man-hours correcting just its student records.

Canadian (and world) efforts to correct the Y2K problem within government agencies will likely be overwhelmed by a lack of time and personnel. In October Denis Desautels, Canada's auditor general, released a report that outlined the crisis. Mr. Desautels determined that Y2K "testing and implementation phase takes 54% to 60% of the total level of effort, exceeding the inventory, assessment and planning phase and the conversion phase combined."

Yet when the government audit was completed last year, most departments and agencies were still in the process of completing their inventory, assessment and planning phases, and only a few had started Y2K conversion. Consequently, the AG's report warns, "The federal government could yet face undertaking 65% to 90% of the total effort needed to overcome the Year 2000 challenge." To exacerbate matters, most experts say the corrections have to be completed by 1998 because it will require a full year to make sure no line of code was overlooked.

The deadline is so close, and there is so much work still to be done within government agencies, that Nancy Cheng, principal author of the auditor general's report, says her office is now working to identify essential government systems to protect. "We should select 20 to 30 systems," she says, "and concentrate on getting them up to standards." These include health and safety programs, financial programs "that keep the government liquid," and such monthly pay-outs as employment insurance, old age pension cheques, welfare payments to Indians on reserves and child support and alimony programs.

But data acquisition and maintenance conversion may be simple when compared to the problems caused by embedded control systems. These are the tiny computers that are the key elements in operating everything from automatic coffeemakers and assembly lines to electrical power and phone systems and automobiles. Such systems are filled with microchips containing burned-in computer programs (firmware) that cannot be fixed, only replaced. A significant number of these chips also use two-digit year dates. And when they become confused by double zeros such chips can shut down everything to which they are connected.

The world does not have to wait until 2000 to find out what embedded controllers do when they do not recognize a date. IndustryWeek magazine reports that on December 31, 1996, a computer glitch at Tiwai Point on New Zealand's south island created more than $1-million worth of damage to an aluminum plant owned by New Zealand Smelters. At the stroke of midnight production in all smelting potlines stopped because the system's 660 embedded controllers failed to understand that day 366 was the extra day that occurs in a leap year. When the tiny computers failed to regulate temperatures, five cells overheated, damaging them beyond repair. Two hours later the same problem occurred in a similar smelter in Tasmania resulting in similar damage.

Ron Kenyon, an information systems consultant since 1971, reports that there are probably more than 25 billion embedded control systems around the planet. Of that number, he says, only about 1% to 5% are programmed to fail when the year 2000 arrives. Obviously, there are too many embedded systems in place to test them all in time. And the testing mechanisms available so far are prohibitively expensive for most companies. "It's a guesstimate," Mr. Kenyon admits, "but I suspect that over 90% of the world's industrial systems are still to be surveyed."

Mr. Kenyon reports that the list of industries willing to admit they are potentially at risk is steadily growing, including: petrochemical refineries, oil and gas pipeline controls, food processing and preserving operations, pharmaceutical production and large-scale transportation systems. Late-model automobiles can have as many as 50 microprocessors, while a large airliner can have up to 500. Most of them are not date sensitive. But some are, and until 2000, no one can accurately predict what they will do.

Furthermore, system administrators admit that such critical systems as air traffic control should have been replaced years ago. Official pronouncements to the contrary, few experts believed Federal Aviation Administration systems would enter the new millennium without a hitch. Their suspicions were confirmed earlier this month when the U.S. General Accounting Office reported that the FAA will be crippled by the Y2K bug. And due to the unique precision of its timing systems, the world's Global Positioning System is expected to start experiencing problems as early as August 1999. "It's possible," Mr. Kenyon predicts, "that airliners could begin receiving wildly incomprehensible data."

But being Y2K compliant at the turn of the century will mean nothing if the continent's electrical systems shut down, a possibility that utilities are finding increasingly difficult to deny. On February 19 the Western Electric Power Institute (WEPI), the trade institute for most electrical utilities in western North America, will hold a one-day meeting entitled Electricity Shutdown 2000: Potential Disasters of Embedded Chips. The published agenda lists discussions on such topics as "examples of failures that could occur in the interconnected grid" and "trip points in the supply line for devices that may or may not handle the Y2K transition." WEPI program manager Terri Coppersmith says utilities will discuss their "best practices" in an attempt to forestall major shut-downs.

Greg Ptashny, manager of the Y2K project for investor-owned TransAlta Utilities Corporation, a member of WEPI, confirms that "There are control systems and devices in power generation and transmission stations that are potentially sensitive to the date change." And while he refuses to speculate about the possibility of a shut-down, he does not deny the possibility. He adds that his company is planning not to depend on telephonic communication with field workers on December 31, 1999. And he also agrees that if a number of TransAlta's larger customers were to simultaneously stop using power, the system's generators could experience "voltage collapse" and shut down. Mr. Ptashny is understandably cautious, but promises his company will inform the public if it becomes obvious its Y2K problems have become insurmountable. "It's important not to spread panic," he says, "but we should increase awareness and encourage people to be prepared."

In contrast to Mr. Ptashny, Seiki Harada, Y2K coordinator for B.C. Hydro, a crown corporation that does not belong to WEPI, downplays potential problems. "We got going with our program in 1994," he reports. "In general, we're in good shape." Left unspoken is that one problem facing B.C. Hydro, along with every other user of embedded chips, is the rapidity with which chip design and manufacture changes. In many cases replacement chips simply are no longer available, requiring the manufacture of entirely new systems.

In a statement that raises concerns about B.C. Hydro's overall preparedness in dealing with the Y2K crisis, Mr. Harada downplays the possibility of a shut-down if large customers were to go off-line. "Extra power would just go to ground," he says. Later, he changed his mind saying, "I have since learned that if many customers suddenly stopped using power, we would have some issues."

It is still fashionable in some quarters to decry the "millennium meltdown" as hysteria, but Peter de Jager, a Brampton, Ont., consultant who specializes in Y2K issues, argues that the debunkers are outside the industry. On the contrary, reports Mr. de Jager, he has been receiving unsolicited reports, understandably anonymous, that should frighten anyone. The reports include: a chemical plant manager who describes an embedded chip that, if not fixed, will cause explosions involving chlorine gas; a report by an airline Y2K manager that his company's planes will not fly from December 31, 1999, to the second week of 2000 (this in addition to the admission by the Dutch airline KLM that its planes will also be grounded); and a list of some 30 medical devices that will fail in 2000.

"But it goes beyond that," Mr. de Jager declares. "I spoke to 400 industry insiders in Phoenix February 12. 'The code is broken,' I said, 'does anybody disagree?' Not one person raised a hand." "Then," Mr. de Jager reports, "I asked the crowd, 'If the year 2000 started tomorrow, could your company do business?' Again, no one raised a hand." "I guarantee no one will forget the year 2000," Mr. de Jager concludes. "This will be the defining moment of our lives."

—Shafer Parker Jr.

BC Report is available at your favorite newsstand,
or save up to 43% with a subscription